Chapter 2 of "Ethics in Nonprofit Organizations--Introduction to Nonprofit Ethics"

In recent years, there has been a trend toward turning nonprofit management into a recognized profession, with credentialing becoming available for fundraising executives, association managers, and nonprofit organization managers. Organizations such as the Association of Fundraising Professionals (AFP), the American Society of Association Executives (ASAE), and the National Council of Nonprofit Associations—and the state and local chapters of these organizations—have sought to professionalize their memberships.

Unlike government (which has the taxing power) and for-profit business (which generates revenue through market transactions), charities generate much of their revenue through nonmarket mechanisms such as seeking donations—in the form of contributions from the public and grants from foundations and government. This form of revenue generation offers a ripe area for fraudulent practices, and many of the ethics-related principles that differentiate nonprofit organizations from their government and private sector counterparts focus on this area.

Until 2003, there were two major ethical codes focusing on fundraising standards for charitable organizations. The first, which was developed during the late 1980s and went into effect in 1992 (NCIB, 2000), is the National Charities Information Bureau’s (NCIB) Standards in Philanthropy. Almost all of these ethical standards would have been meaningless in anything other than a nonprofit context. The standards were not enforceable by law, but served as a guide to both donors and those who run the charities. The standards were grouped into nine areas:

1. Board Governance

2. Purpose

3. Programs

4. Information

5. Financial Support and Related Activities

6. Use of Funds

7. Annual Reporting

8. Accountability

9. Budget

Another code, the Council of Better Business Bureau’s Standards for Charitable Solicitations, was first published in 1974.

In 2001, NCIB merged with the Foundation of the Better Business Bureau and its Philanthropic Advisory Service (PAS). The new organization, the Better Business Bureau’s Wise Giving Alliance, developed an updated code, published in March 2003. In 2007, the BBB rebranded its charity resources with a “Start With Trust” campaign. Charities that meet its standards are now referred to as “BBB accredited charities” (Better Business Bureau, 2010). The 20 standards that comprise this influential ethics code can be found at: http://www.bbb.org/us/charity

Among the most controversial aspects of this code is the provision that calls on charities to allocate at least 65% of their donations for program expenses, spending no more than 35% of related contributions on fundraising. This is a higher standard than either the NCIB (60%) or the BBB’s Philanthropic Advisory Service (50%) had enforced prior to the merger.

In December 2009, the Wise Giving Alliance announced that it was temporarily loosening its standards because of the severe recession. For the fiscal years ending in June 2008-2010, organizations still qualified for the Wise Giving Alliance stamp of approval if the organization spent at least 55% of donations on program expenses and no more than 45% on fundraising (Hall, 2009). As of 2013, the standard is back to a minimum of 65% for program expenses and a maximum of 35% for fundraising expenses (Better Business Bureau, n.d.)

Other standards in this code provide for regular assessment of the CEO’s performance, establishment of a conflict-of-interest policy, the completion of a written assessment of the charity’s performance at least every two years, and standards protecting donor privacy. The new standard frowns upon accumulating unrestricted net assets available for use that exceed either three times the amount of the past year’s expenses or three times the current budget, whichever is higher.

The national professional association of fundraisers also has an ethics code. The Statement of Ethical Principles of the Association of Fundraising Professionals (AFP) was adopted in 1991 when that organization was known as the National Society of Fund Raising Executives (NSFRE). AFP “exists to foster the development and growth of fund-raising professionals and the profession, to promote high ethical standards in the fund-raising profession and to preserve and enhance philanthropy and volunteerism” (NSFRE, 1991). This code was amended in 2007 and expanded to 25 principles.

AFP’s ethics code consists of a set of general ethical principles, introduced by a preamble that recognizes the stewardship of fundraisers and the rights of donors to have their funds used for the intent they expect.

Many of these principles are deontological, and would be appropriate for any type of organization, such as to “foster cultural diversity and pluralistic values, and treat all people with dignity and respect” and “value the privacy, freedom of choice and interests of all those affected by their actions.” Some of the principles are appropriate for public organizations, such as having an obligation to “safeguard the public trust,” and others are parochial to the profession, such as to “put philanthropic mission above personal gain,” and “affirm, through personal giving, a commitment to philanthropy and its role in society.”

One year after the adoption of the AFP principles, the organization adopted its “Standards of Professional Practice” and incorporated them into its ethics code. Its 25 principles are mostly in the form of “members shall” and “members shall not.”

A statement within the Code notes that violations “may subject the member to disciplinary sanctions, including expulsion, as provided by the (AFP’s) Ethics Enforcement Procedures.”

Some of these standards are perfunctory, such as “members shall comply with all applicable local, state, provincial, federal, civil and criminal laws.” Others are general and broad, with implications that are not easily subject to interpretation, such as “Members shall not exploit any relationship with a donor, prospect, volunteer or employee to the benefit of the member or the member’s organization.” Among issues raised by the standards are conflicts of interest, truthfulness, privacy, and financial accountability.

Another issue raised in the principles that is of current interest in a number of professions is the standard that “Members shall not accept compensation that is based on the percentage of charitable contributions.…”

Some states have expressly prohibited lobbyists from signing contingency fee contracts in which they are paid only when they are successful in getting a bill or amendment passed by the legislature. The theory is that such contracts encourage lobbyists to engage in efforts that go beyond the boundaries of acceptable behavior. On the other hand, contingency fees are routine for attorneys in civil cases. It is also not unusual for professional fundraisers to be paid a percentage of the amount they raise. Many in the field find that this practice promotes unethical solicitations (e.g., presentations that exaggerate facts, minimize disclosure, and other behavior to intimidate and harass potential donors), and it is interesting that a major professional organization such as the AFP has taken an unequivocal position in opposition to compensation based on the amount a fundraiser raises. This is an example of a teleological approach to ethics, in that there is nothing inherently unethical about basing compensation on “performance.”

A 2001 White Paper published by the Association of Fundraising Professionals (AFP) with an excellent discussion about this issue can be found at: http://www.afpnet.org/Ethics/EthicsArticleDetail.cfm?itemnumber=734

In February 2004, Independent Sector adopted a Statement of Values and Code of Ethics for Nonprofit and Philanthropic Organizations, and recommended that it serve as a model. The statement identifies a set of values to which nonprofits may subscribe, including commitment to the public good, accountability to the public, and commitment beyond the law. It also outlines broad ethical principles in the following areas: personal and professional integrity, mission, governance, legal compliance, responsible stewardship, openness and disclosure, program evaluation, inclusiveness and diversity, and fundraising. The full text can be accessed at: http://www.independentsector.org/code_of_ethics

Standards for Excellence

In 1998, the Maryland Association of Nonprofit Organizations initiated a program whereby charities can receive certification that they meet basic ethical and accountability standards. As a result of two major grants, the program has been expanded beyond Maryland to include five other states. The 55 performance standards required for an organization to be certified by the program are grouped in eight areas:

1. Mission and Program

2. Governing Board

3. Conflict of Interest

4. Human Resources

5. Financial and Legal

6. Openness

7. Fundraising

8. Public Affairs and Public Policy

Participating charities may demonstrate that they carry out the standards by participating in a peer review process. They submit an application, document their compliance with the standards, and pay a fee. If the peer review panel affirms that the organization meets the standards, the organization receives a Seal of Excellence, with the expectation that having the Seal will provide the organization with increased credibility with donors and grantmakers. The full set of standards can be found at: http://www.marylandnonprofits.org/html/standards/04_02.asp

Among the standards are:

1. On average, over a five (5) year period, a nonprofit should realize revenue from fundraising and other development activities that are at least three times the amount spent on conducting them. Organizations whose fundraising ratio is less than 3:1 should demonstrate that they are making steady progress toward achieving this goal, or should be able to justify why a 3:1 ratio is not appropriate for their organization.

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2. Fundraising personnel, including both employees and independent consultants, should not be compensated based on a percentage of the amount raised or other commission formula.

3. Nonprofits should have a written conflict of interest policy. The policy should be applicable to board members and staff, and volunteers who have significant independent decision making authority regarding the resources of the organization. The policy should identify the types of conduct or transactions that raise conflict of interest concerns, should set forth procedures for disclosure of actual or potential conflicts, and should provide for review of individual transactions by the uninvolved members of the board of directors.

Ethical Issues in Nonprofit Management

Among the general categories of ethical conflicts that are endemic to the nonprofit sector are accountability, conflict of interest, and disclosure (Kaufman and Grobman, 2011). Specific issues of interest are relationships between board members and the staff; board members and the organization (such as business relationships); self-dealing; charitable solicitation disclosure; the degree to which donations finance fundraising costs rather than programs; the accumulation of surpluses; outside remuneration of staff; the appropriateness of salaries, benefits, and perquisites; and merit pay (Kaufman and Grobman, 2011). For example, pay based on income received rather than mission accomplished is considered unethical. Staff of charities are under more of an obligation not to exploit their position on staff for personal gain (such as charging a fee for outside speaking engagements on their own time) than their for-profit counterparts. Unlike their for-profit or government counterparts, charities generally are under an ethical, if not legal, obligation not to accumulate large surpluses (Kaufman and Grobman, 2011). Salaries, benefits, and perquisites must be “reasonable,” and prior to the promulgation by the IRS of temporary regulations on January 10, 2001 relating to this and other “excess benefit” transactions, the legal requirements applying to these issues were in a gray area (Grobman, 2011).

A different set of ethical issues exists around disclosures to foundation and corporate funders. For instance, what is the obligation to disclose changed circumstances after a proposal is submitted and before it is acted upon, such as when key staff have announced plans to leave? If the organization knows that the changed circumstance might affect the decision, is it unethical not to disclose it?

Ethical Dilemmas

There are circumstances that leaders in nonprofit organizations can identify in which there is a clear choice about how to behave. We know it is clearly unethical (and illegal) to embezzle funds that belong to our organizations. We know it is unethical (and usually illegal) to lie to or otherwise deceive potential donors to manipulate them to give. And we know it is unethical (and illegal) to make false statements on our 990 tax returns to make our organizations’ performance appear better than it really is. These are just a few examples of situations in which there is little doubt about the choices we can make between doing the right thing and the wrong thing.

Yet, there are often circumstances in which there is some ambiguity about what one’s behavior should ethically be, even if the individual has an absolute commitment to behaving ethically. This can occur when there are two or more important ethical principles in conflict, and behaving in a manner that honors one principle may bring about conflict with honoring a different ethical principle that may be equally important.

For example, a coworker may come to you to discuss a problem, and ask you to swear beforehand that you will keep what he says in total confidence, and you agree. And then that coworker shares information that you feel ethically compelled to share with your board chair, or even law enforcement authorities, to avoid potential harm to the organization or to individuals. In this example, one principle, “preserving confidentiality,” might conflict with another, the “duty to report.” You have to make a choice not between doing the right thing and doing the wrong thing—as would be the case in deciding whether or not to divert organization resources to one’s personal benefit—but, rather, you must make a choice between doing the right thing or doing another right thing when one cannot reasonably do both.

Regardless of which choice one makes, there is at least one ethical principle that would be violated.

This is what is known as an ethical dilemma—a situation in which there is a conflict between honoring two moral principles, and one cannot act in a way that satisfies one of them without not satisfying the other.

Acting with loyalty and in the best interests of one’s organization is considered ethical. So is being a whistle-blower when that organization is acting unethically itself. It is considered ethical to act in the best interest of your stakeholders (duty of care), and also ethical to let them make decisions for themselves (self-determination). How should you act when you strongly feel that they will not really be acting in their self interest if they make a choice that you strongly feel will harm them? These are common examples of two ethical principles colliding.

Some of the cases and scenarios in this book highlight examples of nonprofit organization leaders facing a choice between being ethical and unethical. Other cases include examples of ethical dilemmas. In these, nonprofit leaders with the best intentions of acting ethically find themselves in situations that are difficult to deal with, because of conflicts among two or more lofty ethical principles that come into conflict.

Resolving Ethical Dilemmas

There are many standard models that ethicists have developed to make decisions about one’s behavior when facing an ethical dilemma. One popular model is called RESPECT, developed by Yeo and Moorhouse in 1996 (in Guttman, 2006), and is an acrostic for:

• Recognize the moral dimensions of the problem.

• Enumerate the guiding and evaluative principles.

• Specify the stakeholders and their guiding principles.

• Plot various action alternatives.

• Evaluate alternatives in light of principles and stakeholders.

• Consult and involve stakeholders as appropriate.

• Tell stakeholders the reason for the decision.

A model I like just a bit better is attributed to Frederic Reamer (2006), modified slightly for the purpose of this discussion. It is comprised of the following steps:

• Identify the ethical issues that are controversial.

• Identify those who will be affected by the decision.

• Identify the potential courses of action, and the pros and cons of doing each.

• Analyze how each stakeholder might be affected, and how the decision is or is not consistent with one’s values, one’s organization, and one’s profession.

• Consult others who are not affected about the dilemma for some input and advice.

• Make the decision, and document what was decided.

• Follow up and evaluate the result of the decision.

It might not be unusual for a party adversely affected by a decision made by a nonprofit organization leader to contest it in some way. By following a standard model, it is more likely that the decision can be justified. This is certainly welcome if one finds himself or herself on the witness stand in a criminal or civil trial having to defend a decision one has made in response to a situation in which any course of action could be questioned on legal or ethical grounds.

Practical Ethics Issues to Consider in Nonprofit Organizations

The following are some ethics issues that are appropriate for nonprofit boards and staff to consider:

1. Accountability

Accountability often is overlooked in discussions about ethics. Because of the unique status of 501(c)(3) organizations, they have a special obligation to the public to be accountable for the results of their activities that justify their tax exemptions and other privileges. Organizations should continually challenge themselves by asking if the outcomes produced are worth the public investment.

Nonprofit boards of directors have a special obligation to govern with integrity. Governing with integrity means that the organization recognizes that it is accountable to the public, to the people it serves, and to its funders. Accountability includes the concept that nonprofit organizations exist only to produce worthwhile results in furtherance of their missions.

In addition, accountability encompasses a core system of values and beliefs regarding the treatment of staff, clients, colleagues, and community. Yet, organizational survival needs too often undercut core values. Although everyone in the organization is responsible, it is the board’s ultimate responsibility to ensure that its values are not compromised, and that the activities are conducted within acceptable limits.

Staff will sometimes pursue grants and contracts, or engage in direct solicitation campaigns, for the primary purpose of growing. This subtle issue of accountability is seldom discussed. Boards sometimes ask whether the executive director “grew the organization” as the primary criterion for measuring success. Boards have an obligation to ascertain that all activities support the organization’s mission.

2. Conflict of Interest

A potential conflict of interest occurs any time organizational resources are directed to the private interests of a person or persons who have an influence over the decision to use those resources. Examples might include the leasing of property owned by a relative of the executive director or a board member, the board awarding itself a salary, the organization hiring a board member to provide legal representation, or the executive director hiring a relative or a board member’s relative.

A conflict also can occur when the person (or persons) making a decision expects something in exchange from the person in whose favor the decision is made. One example is the case in which an executive director retains a direct mail firm, and the executive director’s spouse is hired by that direct mail firm shortly thereafter.

With regard to board members, the cleanest approach is to adopt a policy that does not allow any board member to profit from the organization. It is the duty of every board member to exercise independent judgment solely on behalf of the organization. For example, suppose a board member who owns a public relations business successfully argues that the nonprofit needs a public relations campaign and then is hired to conduct the campaign. The board member’s self-interest in arguing for the campaign will always be subject to question.

Suppose, in the above example, the board member offers to do the campaign at cost, and that is the lowest bid. It may be that even “at cost,” the board member’s firm benefits, because the campaign will pay part of the salary of some staff members or cover other overhead. It may be perfectly appropriate to accept the board member’s offer, even though it is a conflict of interest. However, it is absolutely essential that the board have a procedure in place to deal with these types of issues.

Some organizations permit financial arrangements with board members, provided that the member does not vote on the decision. Given the good fellowship and personal relationships that often exist within nonprofit boards, such a rule can be more for show and without substance.

A similar conflict can occur in the awarding of contracts to certain individuals who do not serve on the board. There may be personal reasons for one or more members of the board or the executive director to award contracts to particular persons, such as enhancing their personal or professional relationships with that person.

There are instances in which it is appropriate to have a contract with an insider, such as when a board member offers to sell equipment to the organization at cost, or agrees to sell other goods or services well below market value. Here, too, the organization should assure itself that these same goods or services are not available as donations.

It is essential for the board to confront and grapple with these issues and adopt a written policy to govern potential conflicts of interest, in order to avoid the trap of self-dealing or its appearances. Many potential abuses are not only unethical, but also illegal as a result of the Taxpayer Bill of Rights 2, enacted in July 1996 (Public Law 104–168, 110 Stat. 1452).

3. Disclosures

There is much disagreement within the nonprofit sector regarding how much disclosure is required to those who donate to charitable nonprofits. The first obligation of every organization is to obey the laws and regulations governing disclosure. Nonprofits have a legal and ethical obligation to report fundraising costs accurately on their IRS Form 990, to obey the requirement regarding what portion of the cost of attending a fundraising event is deductible, and to comply with state charitable registration laws and regulations.

Nonprofits face a more difficult ethical issue when deciding how much disclosure to make that is not required by law, particularly if the organization believes that some people may not contribute if those disclosures are made. One controversial example of this is Kiva (http://kiva.org), which many feel does excellent work in facilitating micro-loans to deserving entrepreneurs. But, among other criticisms, the organization has taken flack for making it appear that potential investors choose to whom to make loans, when in most cases, the entrepreneur any investor chooses to make a micro-loan to has already received a loan, and the investor’s funds are channeled to others. (See: http://www.nytimes.com/2009/11/09/business/global/09kiva.html?_r=0)

In the for-profit corporate world, the Securities and Exchange Commission demands full, written disclosure of pertinent information, no matter how negative, when companies are offering stock to the public. There is no comparable agency that regulates charitable solicitations by nonprofits. Nonprofits must be very careful to disclose voluntarily all relevant information and to avoid the kind of hyperbole that misrepresents the organization.

Another difficult issue is whether fundraising costs should be disclosed at the point of solicitation. The costs of telemarketing campaigns or of maintaining development offices are sometimes 80%, or even more, of every dollar collected. Some argue that people wouldn’t give if these costs were disclosed. Others argue that if the soliciting organization cannot justify these costs to the public (and in many cases, they are not justifiable), then the organization is not deserving of support.

4. Accumulation of Surplus

If the funds of a charitable nonprofit are to be used for charitable purposes, what is a reasonable amount of surplus to accumulate? The Wise Giving Alliance has suggested a ceiling of three times the current year’s expenses or the next year’s budget, whichever is greater.

Organizations should consider the circumstances under which it is appropriate to disclose to prospective donors the amount expected to be used to accumulate a surplus. Clearly, if a major purpose of the solicitation is to build a surplus, that should be disclosed.

5. Outside Remuneration

Executive directors and other staff often are offered honoraria or consulting fees for speeches, teaching, providing technical assistance, or other work. The ethical issue is whether the staff person should turn the fees over to the nonprofit employer or be able to retain them. Potential conflicts can be avoided if the policy is based on the principle that all reasonably related outside income belongs to the organization. Thus, an executive director’s honorarium for speaking to a national conference as a representative of the organization or an expert in his or her field would revert to the employer, but his or her fee for playing in a rock band on weekends could be individual income.

The argument for this policy is that the line between the employer’s and the employee’s personal time is not so easy to draw. An argument against this principle is that employees’ usage of their spare time should be of no concern to the employer. Is it ethical for an employee to exploit the knowledge and experience gained on the job for personal gain? Are we buying only time from our employees, or do we expect that we are getting the undivided professional attention of that person?

If the board or executive director is silent on this issue, the assumption is that earning outside income is a private matter. It makes sense to have a clear policy on outside income before an employee is hired.

6. Salaries, Benefits, and Perquisites

Determining an appropriate salary structure is perhaps the most difficult ethical issue in the nonprofit sector. Ethical considerations arise at both the high and low ends of the salary spectrum.

If an organization is funded by grants from foundations and corporations or by government contracts, the funders can and do provide some restraint on excessive salaries. However, if the nonprofit is funded primarily by individual donations or fees for service, such constraints (other than, perhaps, those relating to the intermediate sanctions regulations of the Internal Revenue Service) are absent.

Boards fall into an ethical trap if they reward executive directors based on the amount of income received, rather than on how well the mission is accomplished. A board can consider many criteria when setting the salary of the executive director. These include the size and complexity of the organization, what others in similar organizations are earning, and whether the salary is justifiable to the public. Some nonprofits include proportionality in their salary structures by limiting the highest paid to a factor of the lowest paid (e.g., the highest can be no more than three times the lowest).

As a result of enactment of the Taxpayers Bill of Rights 2, there are now legal as well as ethical restrictions on paying excessive compensation. Ethical management of employees requires that each person be treated with dignity and respect, paid a salary that can provide a decent standard of living, and given a basic level of benefits, including health insurance coverage. A potential critical conflict arises when a charitable organization working to spread its social values treats its staff in a way that conflicts with its organizational values.

7. Personal Relationships

Nonprofit organization executives and board members must not engage in sexual harassment, or behavior that makes an employee feel uncomfortable at best or threatened and intimidated, at worst. Employees should be treated fairly, which among other things, means that no favoritism should be permitted with respect to work assignments. Discrimination should not be permitted, even if it doesn’t meet the threshold required for legal violations.

Nepotism—the hiring of family members—should be prohibited. Nonprofit executives and board members should seek to keep personal friendships from influencing professional judgment. Managers shouldn’t make it difficult for employees to maintain an appropriate work-family balance. Privacy and confidentiality of workers should be respected. A diverse workforce means that cultural differences among staff should be respected to the maximum extent possible.

Conclusion

There are many other ethical issues that nonprofit organizations may encounter, such as the personal use of office supplies and equipment; time off for volunteering for other nonprofit organizations; personal use of frequent flier mileage; the extent of staff and board diversity; and the use of private discriminatory clubs for fundraisers, board meetings, or other events. The list is endless. Many of these issues are raised in the scenarios section of this book, beginning on page 103.

It is important that nonprofit organizations make a conscientious effort to engage in discussions about ethics and values on a regular basis, recognizing that the charitable nonprofit sector has a special obligation to uphold the very highest standards. Boards of directors of charitable nonprofits have a pivotal role in this regard. Boards cannot play a more important role than ensuring that nonprofits are accountable, and that they operate as mission- and value-driven organizations.

Many who choose to work in the nonprofit sector do so because the stated values of the sector and their personal values are in harmony. It is crucial that such people be vigilant against the erosion of those very principles that initially attracted them to the work.

Only in this way can the public be assured that the charitable nonprofit sector remains worthy of its privileges and continues to occupy its special and unique place in our society.

Discussion Questions

1. Should the nonprofit sector be held to a higher ethical standard than its for-profit counterpart? Why or why not? What about compared with the government sector?

2. Discuss the advantages and disadvantages of having a formal organizational ethics code.

3. If a nonprofit executive writes a book about the public policy issues related to his or her work, as the leader of an organization, should the royalties go to the author or to the organization?

4. Discuss how nonprofit executives who share a virtue ethics approach might have widely divergent responses to dealing with some typical ethical dilemmas. Compare this with those who share a utilitarian approach.

Activities

1.Compare and contrast the three fundraising ethics codes of Independent Sector (http://www.independentsector.org/code_of_ethics), the Wise Giving Alliance (http://www.bbb.org/us/Charity-Standards/), and the Standards for Excellence (http://www.marylandnonprofits.org/html/standards/04_02.asp). Consider who developed them, to whom they apply, how strict the standards are, and what they cover. Create a table to compare provisions relating to common topics covered by these codes.

2. Download a sample of nonprofit organization ethics codes that you find on the Internet. Make a list of ethics codes provisions that tend to be featured in these codes.

3. Devise an ethics dilemma or ethical challenge that might be faced by a nonprofit executive, and make a table showing actions that the executive might take to address the dilemma consistent with the various ethics approaches described in this chapter and the models to resolve them described on page 28.

4. Visit the Web sites of the Josephson Institute of Ethics, Independent Sector, the United Way of America, and the Society for Nonprofit Organizations, and review ethics-related articles that are posted on these sites.

5. Create a Code of Ethics for a new nonprofit organization that might be established to serve as a state association for therapists who deal with child abuse.

Tips for Practitioners

1. Challenge yourself and your organization to hold yourself up to the highest ethical standards, avoiding even gray areas of conflicts of interest and appearances of conflicts of interest.

2. When in doubt, ask yourself, “How would I feel if my family and friends read about this on the front page of the daily newspaper?”

3. Obtain salary surveys published by state associations that represent nonprofit organizations, and determine whether anyone in your organization has an unreasonable salary.

4. Demand that all business relationships with the organization be at “arm’s length,” and obtain at least three bids on any work that costs at least $1,000, even if a board member claims that he or she will provide the product/service at cost.

5. Consider adopting a formal conflict-of-interest policy. See a model policy developed by the Internal Revenue Service included in its 1023 Form (see: http://www.irs.gov/instructions/i1023/ar03.html), or find an annotated version at: http://www.cof.org/files/Documents/Building%20Strong%20Ethical%20Foundations/Conflicts_of_Interest_IRS_Sample_Policy.pdf

6. Support efforts to improve disclosure and accountability of the voluntary sector. Cooperate with expanded enforcement of laws governing this sector, so that the few nonprofits that are abusing the law do not stain the reputation of the entire sector.

Online Resources to Explore

Independent Sector: Accountability Overview

http://www.independentsector.org/accountability

Carter McNamara’s Business Ethics: Managing Ethics in the Workplace and Social Responsibility

http://www.managementhelp.org/ethics/ethics.htm

BBB’s “Start With Trust” Nonprofit Ethics Pages

http://www.bbb.org/us/charity/

Standards for Excellence

http://www.marylandnonprofits.org/html/standards/index.asp

Josephson Institute of Ethics

http://josephsoninstitute.org/

References

Better Business Bureau. (2010). Where is Give.org. Retrieved from http://www.bbb.org/us/Give-org

About the Nonprofit Ethics Education Pages

The content on this page is part of the Nonprofit Ethics Education Pages of this site. This section provides full text of materials from the book, Ethics in Nonprofit Organizations, by Gary M. Grobman. Follow the link below to go back to the beginning of this section and for more information.